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Saturday, December 13, 2008

The federal government devotes considerable resources to what it believes are Employment Insurance “cheaters,’ i.e., people who, according to its rules, should not be allowed to collect Employment Insurance benefits.

But the question must be asked: Who is, by far, the biggest cheater of all? Try the federal government itself. Over the last few years, a large surplus has been built up in the EI fund amounting to some $57 billion as of March 2008. This fund was accumulated as a result of worker and employer contributions – there was no government contribution whatsoever.

Yet this did not stop either Liberal or Conservative governments from looting this fund and using it for other purposes. In the business world, the term for such dark practices is embezzlement, and it can fetch you two to five years in a penitentiary. The difference is, of course, that the government has carried out its theft in broad daylight.

Last Spring, the Conservative government finally announced that it was doing away with this practice of dipping into what are supposed to be insurance payments for laid off workers. It has since formed the Canada Employment Insurance Financing Board, which supposedly will now ensure the funds are used solely for unemployment related purposes.

However, aside from $2 billion in start up money, the approximately $55 billion that is owed will not be returned to the fund. The government gets to keep it all, even though it contributed nothing.

What is the loss to workers in such British Columbian towns as Mackenzie, Fort St. James, Quesnel, Prince George, Kamloops and Port Alberni? As a province, BC has about 12% of Canada’s population. So, if we take 12% of the $55 billion, the amount that BC workers are owed (but may never see) is between $6 billion and $7 billion.

Such a cushion would go a long way to ease the pain of workers in communities like Mackenzie, extend benefits, as well as pay for a large amount of retraining. Indeed, that was what the EI fund was supposed to be for in the first place.

All of this puts another kind of light on other government funding. A couple of years ago the federal government announced that it will be supplying $1 billion over ten years to help the province of BC cope with the economic and environmental devastation caused by the massive pine beetle problem.

At the time, not a few commentators praised this “contribution,” and hailed the government’s “generosity” and “forward thinking.” But how are the workers and communities of British Columbia ahead in all of this? Someone steals $6 billion from you and gives back $1 billion, and you are supposed to be happy?

And then we have this “progressive coalition” led by the Liberal Party of Canada. Although it, too, promises no more “dipping” into the EI fund, nowhere in the Coalition’s economic plan does it indicate that the federal government should pay back the $55 billion. That is not surprising because the looting of the EI fund actually began under a Liberal government back in the 1990’s. As the old saying goes, the leopard doesn’t change his spots.

These days there is a lot of talk about bailing out the banks, auto monopolies, and other big companies. Before we get into bailouts of big shots, shouldn’t we focus on paying back the $55 billion owed to the unemployed of this country?

Peter Ewart is a writer, college instructor and community activist based in Prince George, BC. He can be reached at: peter.ewart@shaw.ca

Friends; they could have given the loan on the condition that the automakers start building only cars and mass transit that reduce our dependency on oil.

They could have given the loan on the condition that the automakers build cars that reduce global warming.

They could have given the loan on the condition that the automakers withdraw their many lawsuits against state governments in their attempts to not comply with our environmental laws.

They could have given the loan on the condition that the management team which drove these once-great manufacturers into the ground resign and be replaced with a team who understands the transportation needs of the 21st century.

Yes, they could have given the loan for any of these reasons because, in the end, to lose our manufacturing infrastructure and throw 3 million people out of work would be a catastrophe.

But instead, the Senate said, we'll give you the loan only if the factory workers take a $20 an hour cut in wages, pension and health care. That's right. After giving BILLIONS to Wall Street hucksters and criminal investment bankers -- billions with no strings attached and, as we have since learned, no oversight whatsoever -- the Senate decided it is more important to break a union, more important to throw middle class wage earners into the ranks of the working poor than to prevent the total collapse of industrial America.

We have a little more than a month to go of this madness. As I sit here in Michigan today, tens of thousands of hard working, honest, decent Americans do not believe they can make it to January 20th. The malaise here is astounding. Why must they suffer because of the mistakes of every CEO from Roger Smith to Rick Wagoner? Make management and the boards of directors and the shareholders pay for this.

Of course that is heresy to the 31 Republicans who decided to blame the poor, miserable autoworkers for this mess. And our wonderful media complied with their spin on the morning news shows: "UAW Refuses to Give Concessions Killing Auto Bailout Bill." In fact the UAW has given concession after concession, reduced their benefits, agreed to get rid of the Jobs Bank and agreed to make it harder for their retirees to live from week to week. Yes! That's what we need to do! It's the Jobs Bank and the old people who have led the nation to economic ruin!

But even doing all that wasn't enough to satisfy the bastard Republicans. These Senate vampires wanted blood. Blue collar blood. You see, they weren't opposed to the bailout because they believed in the free market or capitalism. No, they were opposed to the bailout because they're opposed to workers making a decent wage. In their rage, they were driven to destroy the backbone of this country, not because the UAW hadn't given back enough, but because the UAW hadn't given up.

It appears that the sitting President has been looking for a way to end his reign by one magnanimous act, just like a warlord on his feast day. He will put his finger in the dyke, and the fragile mess of an auto industry will eke through the next few months.

That will give the Senate enough time to demand that the bankers and investment sharks who've already swiped nearly half of the $700 billion gift a chance to make the offer of cutting their pay.

Sacramento seeks solutions for its wandering army of homelessBy Cynthia Hubert, Sacremento Beechubert@sacbee.com

It was a chilly November night on Bannon Street. In front of the Union Gospel Mission, where men praised God in exchange for a hot meal and a thin mattress, a breeze rippled across a row of colorful tents. More than 100 people were making their home here, creating a fragile community of the pitied and loathed.

Some of them sprawled on dirty sleeping bags on the sidewalk, waiting their turns for one of the beds inside. Some perched on rickety chairs outside their dome tents, drinking King Cobra and telling stories. Their bicycles and clothes and trash were scattered everywhere. They hardly seemed to notice the large rats that prowled the premises in search of bits of discarded food.

The weather has since turned bitingly cold, and the makeshift campsite just north of downtown Sacramento has vanished. Police, responding to complaints from the neighborhood, have chased the homeless men and women away. But the raggedy masses have not gone very far, and they are almost certain to return, only to be rousted again.

It is a chess game that most everyone agrees has to end.

A lawsuit filed in U.S. District Court on behalf of the Sacramento campers argues that the city's practice of rousting campers, issuing citations against them for sleeping outside and sometimes destroying their belongings is illegal. The suit proposes, among other things, that the city establish "high tolerance" campgrounds where law enforcement will allow homeless encampments, acquire one or more vacant lots for "dignity villages" similar to one in Portland, and develop an indoor "tent city" where people could live for lengthy periods.

It is an approach that appears to be gaining traction among authorities, including city police, as well as advocates for the homeless.

"This situation is not safe, and it's not sanitary," says homeless advocate Gregory Bunker, standing among his charges on Bannon Street. "The city needs to acknowledge that we have a problem, and this is not the answer."

A 'bedroom facing the sun'

Eve Deutsch's place is a flimsy orange tent in a field a few yards from the American River bicycle trail, in the shadow of the Blue Diamond almond processing plant.

From here, she can see downtown Sacramento's burgeoning cityscape. The sunsets are spectacular. It is less than a mile, on foot, to Loaves & Fishes, where she eats lunch and takes showers most days.

"I always wanted my bedroom to be facing the sun," she said with a smile, squinting in the fading afternoon light as cyclists in spandex whizzed by on the levee above her. "Oh yes, I can have my breakfast out on the balcony."

But this little slice of heaven has its hellish moments.

It is messy and gritty and physically painful at times, especially during harsh winter months when the tarp covering her tent is no match for the rain and wind. Alcohol and drug abuse is rampant, stealing is common, and sometimes violence erupts in the night. Deutsch, herself an admitted methamphetamine user, relies on a male friend to protect her from potential predators.

Worst of all, though, is the fact that Deutsch and her friends cannot stay in one place for more than a couple of months before being scattered by police. Sometimes, she and other campers move no more than a block away, with a wink and a nod from officers. Some get on buses bound for the city's winter shelter at Cal Expo. Some use their government checks to buy rooms in cheap hotels.

Some 2,500 homeless people live in Sacramento, about 700 of whom have been on the streets for a year or more, surveys suggest. Bannon Street and the almond factory are two of the area's largest camps, and a majority of homeless people float between the two, along with a third site known as The Island, off Garden Highway, and dozens of smaller ones.

"What are they going to do with us?" asked Deutsch, a slip of a woman who stands about 5 feet tall, quotes Einstein and reads Stephen King and the Bible. "We don't want that much. Just a piece of land and our freedom. Is it too much to ask?"

Bush's Final F.U. The administration is rushing to enact a host of last-minute regulations that will screw America for years to come TIM DICKINSON

With president-elect Barack Obama already taking command of the financial crisis, it's tempting to think that regime change in America is a done deal. But if George Bush has his way, the country will be ruled by his slash-and-burn ideology for a long time to come.

In its final days, the administration is rushing to implement a sweeping array of "midnight regulations" — de facto laws issued by the executive branch — designed to lock in Bush's legacy. Under the last- minute rules, which can be extremely difficult to overturn, loaded firearms would be allowed in national parks, uranium mining would be permitted near the Grand Canyon and many injured consumers would no longer be able to sue negligent manufacturers in state courts. Other rules would gut the Endangered Species Act, open millions of acres of wild lands to mining, restrict access to birth control and put local cops to work spying for the federal government.

"It's what we've seen for Bush's whole tenure, only accelerated," says Gary Bass, executive director of the nonpartisan group OMB Watch. "They're using regulation to cement their deregulatory mind-set, which puts corporate interests above public interests."

While every modern president has implemented last-minute regulations, Bush is rolling them out at a record pace — nearly twice as many as Clinton, and five times more than Reagan. "The administration is handing out final favors to its friends," says Véronique de Rugy, a scholar at George Mason University who has tracked six decades of midnight regulations. "They couldn't do it earlier — there would have been too many political repercussions. But with the Republicans having lost seats in Congress and the presidency changing parties, Bush has nothing left to lose."

The most jaw-dropping of Bush's rule changes is his effort to eviscerate the Endangered Species Act. Under a rule submitted in November, federal agencies would no longer be required to have government scientists assess the impact on imperiled species before giving the go-ahead to logging, mining, drilling, highway building or other development. The rule would also prohibit federal agencies from taking climate change into account in weighing the impact of projects that increase greenhouse emissions — effectively dooming polar bears to death-by-global-warming. According to Carl Pope, executive director of the Sierra Club, "They've taken the single biggest threat to wildlife and said, 'We're going to pretend it doesn't exist, for regulatory purposes.'"

Bush is also implementing other environmental rules that will cater to the interests of many of his biggest benefactors:

BIG COAL In early December, the administration finalized a rule that allows the industry to dump waste from mountaintop mining into neighboring streams and valleys, a practice opposed by the governors of both Tennessee and Kentucky. "This makes it legal to use the most harmful coal-mining technology available," says Allen Hershkowitz, a senior scientist at the Natural Resources Defense Council. A separate rule also relaxes air-pollution standards near national parks, allowing Big Coal to build plants next to some of America's most spectacular vistas — even though nine of 10 EPA regional administrators dissented from the rule or criticized it in writing. "They're willing to sacrifice the laws that protect our national parks in order to build as many new coal plants as possible," says Mark Wenzler, director of clean-air programs for the National Parks Conservation Association. "This is the last gasp of Bush and Cheney's disastrous policy, and they've proven there's no line they won't cross."

BIG OIL In a rule that becomes effective just three days before Obama takes office, the administration has opened up nearly 2 million acres of mountainous lands in Colorado, Utah and Wyoming for the mining of oil shale — an energy-intensive process that also drains precious water resources. "The administration has admitted that it has no idea how much of Colorado's water supply would be required to develop oil shale, no idea where the power would come from and no idea whether the technology is even viable," says Sen. Ken Salazar of Colorado. What's more, Bush is slashing the royalties that Big Oil pays for oil-shale mining from 12.5 percent to five percent. "A pittance," says Salazar.

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BIG AGRICULTURE Factory farms are getting two major Christmas presents from Bush this year. Circumventing the Clean Water Act, the administration has approved last-minute regulations that will allow animal waste from factory farms to seep, unmonitored, into America's waterways. The regulation leaves it up to the farms themselves to decide whether their pollution is dangerous enough to require them to apply for a permit. "It's the fox guarding the henhouse — all too literally," says Pope. The water rule goes into effect December 22nd, and a related rule in the works would exempt factory farms from reporting air pollution from animal waste.

BIG CHEMICAL In October, two weeks after consulting with industry lobbyists, the White House exempted more than 100 major polluters from monitoring their emissions of lead, a deadly neurotoxin. Seemingly hellbent on a more toxic future, the administration will also allow industry to treat 3 billion pounds of hazardous waste as "recycling" each year, and to burn another 200 million pounds of hazardous waste reclassified as "fuel," increasing cancer-causing air pollution. The rule change is a reward to unrepentant polluters: Nearly 90 percent of the factories that will be permitted to burn toxic waste have already been cited for violating existing environmental protections.

Environmental rollbacks may take center stage in Bush's final deregulatory push, but the administration is also promulgating a bevy of rules that will strip workers of labor protections, violate civil liberties, and block access to health care for women and the poor. Among the worst abuses:

LABOR Under Bush, the Labor Department issued only one major workplace-safety rule in eight years — and that was under a court order. But now the Labor Department is finalizing a rule openly opposed by Obama that would hamper the government's ability to protect workers from exposure to toxic chemicals. Bypassing federal agencies, Labor Secretary Elaine Chao developed the rule in secret, relying on a report that has been withheld from the public. Under the last-minute changes, federal agencies would be expected to gather unnecessary data on workplace exposure and jump through more bureaucratic hurdles, adding years to an already cumbersome regulatory process.

In another last-minute shift, the administration has rewritten rules to make it harder for workers to take time off for serious medical conditions under the Family and Medical Leave Act. In addition, the administration has upped the number of hours that long-haul truckers can be on the road. The new rule — nearly identical to one struck down by a federal appeals court last year — allows trucking companies to put their drivers behind the wheel for 11 hours a day, with only 34 hours of downtime between hauls. The move is virtually certain to kill more motorists: Large-truck crashes already kill 4,800 drivers and injure another 76,000 every year.

HEALTH CARE In late August, the administration proposed a new regulation ostensibly aimed at preventing pharmacy and clinic workers from being forced to participate in abortions. But the wording of the new rule is so vague as to allow providers to deny any treatment that anyone in their practice finds objectionable — including contraception, family planning and artificial insemination. Thirteen state attorneys general protested the regulation, saying it "completely obliterates the rights of patients to legal and medically necessary health care services."

In a rule that went into effect on December 8th, the administration also limited vision and dental care for more than 50 million low-income Americans who rely on Medicaid. "This means the states are going to have to pick up the tab or cut the services at a time when a majority of states are in a deficit situation," says Bass of OMB Watch. "It's a horrible time to do this." To make matters worse, the administration has also raised co-payments for Medicaid, forcing families on poverty wages to pay up to 10 percent of the cost for doctor visits and medicine. One study suggests that co-payments could cause Medicaid patients to skip nearly a fifth of all prescription-drug treatments. "People who have nothing are being asked to pay for services they rely upon to live," says Elaine Ryan, vice president of government relations for AARP. "Imposing co-pays on the poorest and sickest people in the United States is cynical and cruel."

NATIONAL SECURITY Under midnight regulations, the administration is seeking to lock in the domestic spying it began even before 9/11. One rule under consideration would roll back Watergate-era prohibitions barring state and local law enforcement from spying on Americans and sharing that information with U.S. intelligence agencies. "If the federal government announced tomorrow that it was creating a new domestic intelligence agency of more than 800,000 operatives reporting on even the most mundane everyday activities, Americans would be outraged," says Michael German, a former FBI agent who now serves as national security policy counsel for the ACLU. "This proposed rule change is the final step in creating an America we no longer recognize — an America where everyone is a suspect."

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John Podesta, the transition chief for the Obama administration, has vowed that the new president will leverage his "executive authority" to fight Bush's last-minute rule changes. But according to experts who study midnight regulations, there's surprisingly little an incoming executive can do to overturn such rules. The Bush administration succeeded in repealing just three percent of the regulations finalized before Bill Clinton left office in 2001. "Midnight regulations under Bush are being executed early and with great intent," says Bass of OMB Watch. "And that intent is to lock the next administration into these regulations, making it very difficult for Obama to undo what Bush just did."

To protect the new rules against repeal, the Bush administration began amping up its last-gasp regulatory process back in May. The goal was to have all new regulations finalized by November 1st, providing enough time to accommodate the 60-day cooling-off period required before major rule changes — those that create an economic impact greater than $100 million — can be implemented.

Now, however, the administration has fallen behind schedule — so it's gaming the system to push through its rules. In several cases, the Office of Management and Budget has fudged the numbers to classify rules that could have billion-dollar consequences as "non-major" — allowing any changes made through mid-December to take effect in just 30 days, before Obama is inaugurated. The administration's determination of what constitutes a major change is not subject to review in court, and the White House knows it: Spokesman Tony Fratto crowed that the 60-day deadline is "irrelevant to our process."

Once a rule is published in the Federal Register, the Obama administration will have limited options for expunging it. It can begin the rule-making process anew, crafting Obama rules to replace the Bush rules, but that approach could take years, requiring time-consuming hearings, scientific fact-finding and inevitable legal wrangling. Or, if the new rules contain legal flaws, a judge might allow the Obama administration to revise them more quickly. Bush's push to gut the Endangered Species Act, for example, was done in laughable haste, with 15 employees given fewer than 36 hours to review and process more than 200,000 public comments. "The ESA rule is enormously vulnerable to a legal challenge on the basis that there was inadequate public notice and comment," says Pope of the Sierra Club. "The people who did that reviewing will be put on a witness stand, and it will become clear to a judge that this was a complete farce." But even that legal process will take time, during which industry will continue to operate under the Bush rules.

The best option for overturning the rules, ironically, may be a gift bestowed on Obama by Newt Gingrich. Known as the Congressional Review Act, it was passed in 1996 to give Congress the option of overriding what GOP leaders viewed at the time as excessive regulation by Bill Clinton. The CRA allows Congress to not only kill a new rule within 60 days, but to do so with a simple, filibuster-immune majority. De Rugy, the George Mason scholar, expects Democrats in the House and Senate to make "very active use of the Congressional Review Act."

But even this option, it turns out, is fraught with obstacles. First, the CRA requires a separate vote on each individual regulation. Second, the act prohibits reviving any part of a rule that has been squelched. Since Bush's rules sometimes contain useful reforms — the move to limit the Family and Medical Leave Act also extends benefits for military families — spiking the rules under the CRA would leave Obama unable to restore or augment those benefits in the future. Whatever Obama does will require him to expend considerable political capital, at a time when America faces two wars and an economic crisis of historic proportions.

"It's going to be very challenging for Obama," says Bass. "Is he going to want to look forward and begin changing the way government works? Or is he going to look back and fix the problems left by Bush? Either way, it's a tough call."

Thursday, December 11, 2008

Harvard University's endowment is down at least $8 billion. The slump, slowdown, recession or depression -- or whatever you want to call it -- is taking its toll on higher education's piggy banks.

The Wall Street Journal reports that, "The University of Virginia Investment Management Co. said it lost nearly $1 billion, or 18 percent, of its endowment over the four-month period, reducing it to $4.2 billion. In Vermont, Middlebury College says its endowment fell 14.4 percent, to $724 million. In Iowa, Grinnell College's endowment dropped 25 percent, to $1.2 billion. In Massachusetts, Amherst College says its endowment, $1.7 billion as of June 30, also fell by 25 percent."

Since cost containment is an idea foreign to American higher education, these losses are going to translate into many a bitter moment for countless thousands of college students. At Harvard, which is an extreme case, more than one-third of operating funds come from the now-depleted endowment. In the good old days, higher education might have shrugged its shoulders and told its students to go take out larger loans, something which is hardly possible at this gloomy moment in American history.

Had colleges and universities now looking at large losses kept their money in safe, low-interest, government securities, they would be in much better shape -- but they would also have been attacked by their alumni for such conservative, low-yield use of their endowments. The Journal reports that for many years places like Harvard and Yale "pioneered an investment approach that de-emphasized US stocks and bonds and placed large sums in more exotic and illiquid investments, including timberland, real estate and private-equity funds."

Illiquid is the word for it. Harvard has been trying to sell $1.5 billion in private equity funds and has been unable to get more than fifty cents on the dollar on its original investment. Private equity funds use their money to execute corporate takeovers, and to call them lucrative is something of an understatement; given the university's past profits, it would be hard to shed a tear for Harvard -- except that it will be innocent students and faculty who will get it in the neck.

The rationale for private equity funds, known as buyout shops, is that they take over poorly run companies and spin them off into higher levels of productivity and profitability. Though sometimes that actually happens, we have also seen private equity funds put a little money down, borrow much more to pay for the company, strip it of its assets and leave it dead or dying.

The ever-enterprising Wall Street Journal reports that, "Of the 109 US companies that have filed for bankruptcy this year with assets of $1 million or more, 67 have been owned by buyout shops or been spun off by them, according to data provider Capital IQ. Among the more prominent casualties are retailers Linens 'n Things Inc. and Mervyn's LLC."

Mervyn's was seized and looted by Cerberus Capital Management, the same group of billionaires who now own Chrysler; having exhausted other avenues for unearned profit, they are begging the federal government for a handout. How Cerberus destroyed Mervyn's is instructive. According to the Journal, they and some others "bought Mervyn's from Target Corp. in 2004 for $1.25 billion. The investor group, which structured the buyout as two separate purchases -- one for the retail operations, and one for the chain's valuable real-estate holdings -- has earned Cerberus more than $250 million in profits, say people familiar with the deal."

The stores were stuck paying off the debt Cerberus contracted to buy Mervyn's. This debt was not money borrowed to make Mervyn's more competitive or productive. The stores got nothing from the debt but an added burden and, as is often the case with such private equity takeovers, the victim company collapsed under the weight of the obligations dumped on it and perished along with thousands of jobs.

Another example, this one involving a historic name, is that of Sears. It has fallen into the hands of a hedge fund operator who is milking the company by using its cash to buy back its own stock.

One element in the disaster that has overtaken the American economy is the vast misallocation of capital by entities such as the private equity funds. They are not venture capital enterprises that made bad bets on what seemed like good ideas but free-market vampires. They have been able to take over healthy business organizations and ruin them for their own profit and the larger society's loss.

One of the not-yet-investigated stories is how so much capital fell into hands that wasted it on destructive games of profit, pointless mergers and acquisitions or insane derivative speculations. In the largest sense, capital is the fruit of the labor and the savings of the whole society. To see university endowments and to witness nothing less than productive companies destroyed by debt and bankruptcy is a crime.

Nicholas von Hoffman writes regularly for The Nation. He is the author of thirteen books, including Citizen Cohn, and he is a columnist for the New York Observer.

Tuesday, December 09, 2008

The Ottawa Citizen reports this morning that, "Oilsands production is releasing four billion litres of contaminated water into Alberta's groundwater and natural ecosystems every year, according to a new national report...11 Million Litres a Day: the Tar Sands' Leaking Legacy, released by Environmental Defence..."

"The report is the first comprehensive examination of water pollution from the mines in the Alberta industry and was prepared using the figures from environmental assessment applications submitted by oilsands companies."

The article notes that, "The annual volume of water pollution in 2007 would have been enough to fill the Toronto SkyDome."

VOLUME OF WATER POLLUTION COULD INCREASE BY FIVE TIMES"The report calculated that the total volume of water pollution could increase by five times over the next 10 years depending on when new oilsands projects start production."

THE FEDERAL GOVERNMENT SHOULD INTERVENE"Matt Price, who wrote the Environmental Defence report, said that the federal government should intervene since the contamination is crossing jurisdictional boundaries from Alberta into Saskatchewan and the Northwest Territories. 'We think they (federal regulators) are turning a blind eye to tailings ponds,' said Price. 'We just think that ever since Ralph Klein (was premier), they've sort of been chased out of Alberta and fearful of enforcing the laws.'"

ALBERTA REPLIES"The provincial government says that most of the waste is going into deep aquifers that are already naturally contaminated by the geology of the oilsands."

The full article is athttp://www.canada.com/topics/news/national/story.html?id=1049842

OTTAWA - Oilsands production is releasing four billion litres of contaminated water into Alberta's groundwater and natural ecosystems every year, according to a new national report that was immediately dismissed as "false" by the provincial government.

The annual volume of water pollution in 2007 would have been enough to fill Toronto's Rogers Centre, but could be stopped if the federal government started enforcing its Fisheries Act, the report says.

Alberta's oilsands are releasing billions of litres of contaminated water into the province's groundwater supply, a new report says.Chris Schwarz / Edmonton Journal

"Virtually everyone close to the tarsands industry knows that all tarsands tailings ponds leak - even the new ones - and that while steps are taken to recapture the leakage, a significant portion of contaminated water still escapes into the environment," said the study, 11 Million Litres a Day: the Tar Sands' Leaking Legacy, released by Environmental Defence.

The report is the first comprehensive examination of water pollution from the mines in the Alberta industry and was prepared using the figures from environmental assessment applications submitted by oilsands companies.

The oilsands production process consists of using hot water to separate the oil from sand, resulting in tailings ponds that would remain contaminated for decades. The report calculated that the total volume of water pollution could increase by five times over the next 10 years depending on when new oilsands projects start production.

"Tarsands tailings water is widely acknowledged to be harmful to human health and the environment," the report said. "Experiments with this water on fish have shown serious reproductive impacts. Studies on birds have found increased mortality rates, and experiments on plants have shown delayed germination and lower seedling weights."

Matt Price, who wrote the Environmental Defence report, said that the federal government should intervene since the contamination is crossing jurisdictional boundaries from Alberta into Saskatchewan and the Northwest Territories.

"We think they (federal regulators) are turning a blind eye to tailings ponds," said Price, the energy and climate project manager at the environmental research group. "We just think that ever since Ralph Klein (was premier), they've sort of been chased out of Alberta and fearful of enforcing the laws."

A spokesperson for Environment Minister Jim Prentice referred questions to Environment Canada, which said it needed more time to examine the report before commenting.

However, a scientist from Alberta's Environment Department said the report is misleading people by suggesting that the waste from tailings ponds are contaminating natural ecosystems. The provincial government says that most of the waste is going into deep aquifers that are already naturally contaminated by the geology of the oilsands.

"They make some statements that are patently false," said Preston McEachern, who is section head for science research and innovation in the oilsands environmental management division of Alberta Environment. "The problem with the report, at least the way I see it is structured, is it basically gives the impression that these seepages (from tailings ponds) are turning into surface run-off and going directly into the Athabasca River. That's just not the case."

McEachern, whose division was created less than two years ago, said the Alberta government is spending millions of dollars for research on the environmental impact of the tailings ponds, but he said it was confident that it can prevent any serious contamination of groundwater or ecosystems.

"We know enough in terms of dealing with mitigation for aquifers that would be at risk," said McEachern. "Occasionally problems do occur . . . but we're finding now that our systems are set up well enough that we detect them right away before they will ever become a risk to the environment." He said another important aspect of research is looking into eliminating waste from tailings ponds altogether. "That's the holy grail of all of this," said McEachern.

Sunday, December 07, 2008

The announcement from Addis Ababa that Ethiopian troops are withdrawing from Somalia by the end of this month means that the U.S. has suffered a defeat in the Horn of Africa -- to add to the long list of U.S. foreign policy failures in the Arab and Muslim world.

With American backing, small numbers of Ethiopian troops entered Somalia two and half years ago in July 2006, growing into a force of some 30,000 men over the following moths. Their aim was to drive from power the Union of Islamic Courts (UIC) -- a coalition of Islamist insurgents -- which had taken control of the Somali capital, Mogadishu, the previous month.

The Islamists had managed to put to flight corrupt and extortionate warlords and, after years of anarchy in Somalia, had set about restoring some form of law and order.

But for President George W Bush, Islamic rule in Somalia could not be allowed to stand. However beneficial it might be for the local population, it did not square with Bush’s ‘Global War on Terror’, launched after 9/11. The CIA then sought to overthrow the Islamists by means of Ethiopian forces, and of Abdullahi Yusuf’s ‘Transitional Government of Somalia’ (TGS), a pro-Western and pro-Ethiopian phantom administration, based in Baidao.

Fierce fighting between Ethiopian troops and the Union of Islamic Courts escalated throughout December 2006, causing some 4,000 dead and wounded. By the end of the month, Ethiopian troops, backed by U.S. airstrikes, captured Mogadishu, hours after Islamist fighters fled the city. By 1 January 2007, the southern port of Kismayo -- the last UIC stronghold -- fell to the Ethiopians, while the U.S. Navy patrolled the Somali coastline to prevent Islamists escaping by sea.

The Islamists were routed, but they were not beaten. Almost at once, they started guerrilla operations against Ethiopian troops, trapping them in ambushes and inflicting casualties on them by means of improvised explosive devices (IEDs), the lethal weapon which the United States had come to dread in Iraq.

As was predictable, the conflict attracted to Somalia a motley group of Islamist fighters from the Muslim world, intent on waging jihad against Ethiopia’s occupying army and its American backers.

To the alarm of Ethiopia’s Prime Minister Meles Zenawi, his country’s intervention in Somalia also served to breathe fresh life into two insurgent groups in Ethiopia itself -- namely the Oromo Liberation Front, which has been fighting for autonomy in southern Ethiopia, and the Ogaden National Liberation Front, largely made up of ethnic Somalis, which demands self-determination in eastern Ethiopia.

American help for Ethiopian forces -- in the form of training, weapons supply, clandestine missions, air strikes, and the capture and interrogation of ‘terrorist’ suspects – seems to have been of little avail. On the contrary, it has united rival Somali groups against their common enemies -- Ethiopia and the United States.

After gaining ground in recent months, the Islamist insurgents now control much of the south of Somalia -- including the ports of Kismayo, Merka and Brava. Casting a noose around Mogadishu itself, they are evidently preparing for a final push, once the Ethiopians go home.

As the tide of war turned against him, the Ethiopian leader Meles Zinawi clearly had enough. On 28 November, he sent a message to the United Nations and to the African Union to say that Ethiopian troops would leave Somalia before the end of the year.

This brings to a close a disastrous war that has ravaged the country, killed thousands, displaced over 700,000 from Mogadishu alone, and created a pitiful humanitarian crisis. It is one more nail in the coffin of the Bush Doctrine.

What next? A ‘moderate’ Islamist leader, Shaikh Sharif Ahmed, who broke away from the Union of Islamic Courts, has announced that he would welcome an international force to replace the Ethiopians. His appeal looks like an attempt to promote his own prospects. As he already has some support in Eritrea, Djibouti and Yemen, an international force, he no doubt believes, could put him in power.

But Shaikh Ahmed faces stiff competition from another Islamist leader, Shaikh Dahir Aweys, and indeed from the Shebab, a still more militant Islamist group. The war caused splits within the Islamic movement, which seem likely to result in a new struggle for power.

Preoccupied by the rise of maritime piracy off the Somali coast, Western states are putting together a naval force to combat the pirates. But, after the Ethiopian experience, no country seems prepared to send ground troops into the Somali snake pit.

Patrick Seale is a leading British writer on the Middle East, and the author of The Struggle for Syria; also, Asad of Syria: The Struggle for the Middle East; and Abu Nidal: A Gun for Hire.

At the Prime Minister’s request, the newly minted 40th parliament of Canada has been prorogued, closed until January 26th, creating a situation unprecedented in Canadian history — a government has avoided defeat by dismissing the nation’s lawmakers.

Over the next seven weeks, we will see a wave of propaganda and mobilization, amply funded, from the Conservative Party attacking the opposition leaders. This spending will take place outside the election writ period and thus, like the attacks on Liberal leader Stéphane Dion over the past two years, will be subject to no spending limits whatsoever.

At the end of January, on the date that he has chosen, Mr. Harper will meet Parliament and present a budget.

If his budget and/or throne speech fail to pass the House, Mr. Harper will seek — perhaps successfully — to dissolve parliament and go to a general election. He will have the momentum of seven weeks of wall-to-wall campaigning, without bothersome election spending restrictions, at his back.

If the Conservatives receive a couple of percentage points more of the vote (or if, for example, the Green Party takes one or two percentage points more), Mr. Harper may well receive the majority he has been desperately seeking.

With a majority, Mr. Harper will be able to move rapidly to do many of the things he has been restrained from doing so far — whether this means emasculating the opposition parties by removing democratic, proportional, public funding, completing the destruction of the Canadian Wheat Board, or undermining Aboriginal and women’s rights.

If the Liberals and the NDP enter the next election competing against each other as usual — something Mr. Harper is counting on — they will divide once again the votes of progressive Canadians (the majority) and may well leave themselves, and our democracy, badly damaged.

One thing Mr. Harper may not have counted on is that, instead of falling apart, the coalition may solidify and take the initiative.

This could happen if the NDP and the Liberals (and, hopefully, the Greens as well) make a concrete agreement not to run against each other in any riding in the country.

If the opposition parties took this step, they could win a solid majority of the seats in the election Mr. Harper is hoping to take the country into shortly.

A clear agreement not to run against each other, made ahead of the election, would also have a salutary effect on Mr. Harper’s actions in the House of Commons and may well cool his ardour for another election.

Professor John Ryan of Winnipeg has written a paper, “Canada needs a Liberal-NDP-Green coalition,” in which he asks, how is it that a little more than a third of the voting electorate can decide who forms our government?

Proportional representation would give Canada a more representative government than our current first-past-the-post voting system, but in the meantime the opposition parties have the power to stop Mr. Harper and create a more democratic Parliament.

By forming an electoral coalition, in which the Liberals, NDP and Greens maintain their distinctive identities, but agree not to run against each other, Professor Ryan estimates the coalition could end up with almost twice as many seats as the Conservatives, and the will of the population would be much more accurately reflected in the House of Commons.

Last election saw a record number of Canadians abstain from voting. Many people, the young among them, are appalled at a system which regularly elects a prime minister and a governing party that most Canadians have voted against. Some ask, “Why should I waste my vote?”

The coalition formed in the House of Commons this past week has galvanized a great deal of interest and hope for an end to vote splitting on the centre-left.

Cooperation between the Liberals and the NDP in the past has given Canada some of its most progressive legislation, including national medicare, the Canada pension plan, a new flag and the establishment of Petro-Canada.

A Liberal-NDP electoral coalition that would see the Conservatives reduced to winning approximately one third of the seats in the House, i.e. roughly the percentage of their vote nationally, would re-energize all those Canadians who long for a more representative Parliament, one that more accurately reflects their views inside the House of Commons, rather than leaving them outside as a “wasted vote.”

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David Orchard is an author and fourth-generation farmer. He was the Liberal candidate in Desnethé-Missinippi-Churchill River in the last election and farms at Borden and Choiceland, Saskatchewan.

Kristallnacht in HebronWhen will Israel wake up to its gruesome legacy, asks Khaled Amayreh

Unconcerned about arrest by the police or prosecution by the Israeli justice system, fanatical Jewish settlers in the Palestinian town of Hebron (Al-Khalil) have been attacking Palestinians, damaging and ransacking their property, exactly like Nazi thugs did to Jewish-owned property in Germany 80 years ago.

The settlers, who claim to be acting in the name of true Judaism, espouse a messianic doctrine advocating violence and terror against non- Jews in Israel-Palestine for the purpose of creating a pure Jewish kingdom that would be ruled by Halacha, or Jewish religious law.

The settlers, who represent the core of religious Zionism, believe that the ethnic cleansing of non-Jews in the Holy Land will eventually usher the messianic age and accelerate the appearance of the Jewish Messiah, or Redeemer, who would bring about redemption for Jews and rule the entire world from Jerusalem.

In recent weeks, these thugs have been attacking Palestinian homes, smashing cars, vandalising property and fostering a general atmosphere of fear and terror throughout this town of nearly 200,000 people.

Al-Ahram Weekly has inspected the damage inflicted by settlers and spoken with thoroughly terrorised victims who complained that the Israeli authorities and army were effectively giving the paramilitary terrorists a carte blanche to terrorise Palestinians. "They [the settlers] are Nazi, and if there was a stronger epithet, I would not hesitate to use. You can't imagine the ugliness and brutality of their behaviour," said Ahmed Al-Jamal, a frequent target of settler terror and vandalism.

"Every Friday night and Saturday, dozens of settlers, including kids, descend on our neighbourhood to smash our cars, windows and property and shout 'Death to the Arabs!' This is their way of sanctifying the Sabbath and pleasing God."

Al-Jamal said dozens of settlers, some of them masked, last week attacked his and his brother's and neighbour's homes around 2.30am, smashing windows and windshields of parked cars. "We informed the police, and the police told us they would look into the matter. This is pretty much what they have been telling us since 1970 when these 'Nazis' came to live here."

Mohamed Daana, who lives in Wadi Al-Nasara, located just south of the Jewish colony of Kiryat Araba, said he submitted at least 500 complaints to the Israeli police in a desperate effort to put an end to settler violence and terror against him and his family.

"The last time I went to submit a police complaint in Kiryat Araba one policeman took me to the next room and told me 'I want to advise you, there is no point in submitting all these complaints. We simply can't do anything to help you. The settlers control the state and the army can do little to protect you from them.'" Asked what he would do next to protect his family, Daana said, "I have no choice but to remain steadfast. A harmful neighbour will either die or move away," said Daana quoting an old Arabic proverb.

Last week, dozens of young settlers, many of them wearing masks and armed with submachine guns, rampaged through the Khaled Ibn Al-Walid neighbourhood, not far from the colony of Kiryat Araba. There the settlers, who reportedly were dressed in religious attire, vandalised a Muslim cemetery and scrawled the Star of David on Muslim graves.

On the walls of the Khaled Ibn Al-Walid Mosque, the rampaging thugs scrawled the following phrase: "Mohamed is a pig." This is the new slogan the settlers are mouthing to offend and provoke the Palestinians. The other slogan is Mavet le Arabim or "Death to the Arabs!"

These obscenities are infuriating the Palestinians who warned that settlers were trying to instigate a religious war in the Middle East. "What does the Prophet Mohamed have to do with the conflict? Why are they deliberately provoking us? We have never, and never will speak ill of their prophets and religious figures," said Hassan Jaber, a neighbour of the mosque.

"When someone touches a Jewish cemetery anywhere in the world, the Jews make a big outcry about anti-Semitism. But when Jews commit blasphemous acts against Islam and Christianity, it is freedom of speech."

This is not the first time self-righteous settlers, who claim to be following the Torah, seek to offend Muslim religious sensibilities. According to local Palestinians, settlers have markedly escalated their anti-Islam discourse, mainly by way of scrawling sacrilegious epithets that are deeply offensive to the Islamic faith, such as cursing the Arabic name of God (Allah) and the Prophet Mohamed. Several years ago, a Jewish immigrant from the former Soviet Union pasted on the doors of Arab stalls and shops in downtown Hebron drawings depicting the prophet of Islam as a pig writing the Quran.

Such sacrilegious acts generally go unpunished by the Israeli government, allowing the settlers and their supporters to feel powerful and immune from government action.

The bulk of Jewish settlers in the occupied Palestinian territories follow the teachings of Abraham Kook, the first rabbi of Israel, who taught that Jews should seek to expedite the appearance of the "redeemer" or Jewish Messiah by way of carrying out acts of violence and bloodshed. In 1994, a Jewish settler terrorist, an American immigrant by the name of Baruch Goldstein, murdered at least 29 Arab worshipers who as they were praying at the Ibrahimi Mosque.

Goldstein, who was eventually killed by survivors, became a national hero among religious Zionists and Jewish extremists in general, and his tomb in Kiryat Araba became a pilgrimage site for religious Zionists from around the world. The settlers adopt a manifestly genocidal ideology with regard to how non-Jews living in Israel ought to be treated.

This ideology, which settlers say is based on the Talmud and is taught at the Mirkaz Harav religious Zionist college in Jerusalem, and gives Palestinians in Israel-Palestine three choices: first, comprehensive enslavement whereby non- Jews, or goyem, would have to accept their inferior status, second, outright expulsion, "lest they remain a thorn in your side," and third, Old Testament-style physical extermination.

The settler community in Hebron is not large in terms of numbers. According to Israeli government statistics, no more than 500-600 settlers and Yeshiva (religious school) students live in the old quarter of Hebron among the town's 180,000--200,000 Palestinian inhabitants. However, thousands of Israeli soldiers and paramilitary troops guard and protect the settlers around the clock, with the chief method of protection taking the form of making large parts of the town off-limit to Palestinians. In other words, 200,000 are held hostage to the whims of 500- 600 thugs who demand that non-Jews be enslaved, expelled or exterminated.

Needless to say, this causes immense hardship to Palestinian inhabitants whose freedom of movement and economic activities are harshly restricted. In some cases, a Palestinian living, say, in the vicinity of the Ibrahimi Mosque, is forced to travel several miles in order to get home from a nearby school or grocery store. The reason for such draconian restrictions is to make ordinary life so unbearable for ordinary Palestinians that they would leave their homes "voluntarily" so that the settlers could then seize them without the need of murdering the inhabitants.

As usual, the Israeli government continues to treat the settlers with the greatest temerity, refusing to take decisive action to stop their almost daily acts of violent and terror against Palestinians.

There are three main reasons contributing to the soft-glove policy towards the settlers. First, many of the soldiers serving in the occupied territories, particularly in the Hebron region, are themselves settlers and reluctant to arrest their colleagues. After all, the soldiers and settlers often have the same rabbi and attend the same Yeshiva, and worship at the same synagogue. Moreover, soldiers who are also settlers are effectively answerable first and foremost to their local rabbis, and only secondarily to their army superior. Second, the Israeli state itself views the settlers as a strategic asset that will prevent the creation of a viable Palestinian state, guaranteeing the continuity of Israeli control over the West Bank. This is despite all official propaganda that Jewish settler violence is carried out in spite of the government. Third, the proximity of the upcoming Israeli elections, slated to take place on 10 February, makes the government, especially Defence Minister Ehud Barak (head of the Labour Party) think twice before alienating the settlers, even by carrying out High Court rulings.

Last week, the Israeli High Court ordered the state to vacate Jewish settlers from an Arab building they had seized after forging ownership documents. However, the settlers and their supporters, including 48 Knesset members (out of 120) and former ministers, vowed to confront the army and police "be it as it may". Moreover, the settlers were planing to hold a large rally in Hebron to protest against the court decision and to underscore their determination to have their way.

Israeli President Shimon Peres, the godfather of Jewish settlements in the West Bank who is falsely portrayed as a man of peace, was quoted as saying during a visit to London last week that "Israel will find it difficult to evacuate the settlements without civil war." Yossi Sarid, a former minister, spoke of "a state within a state that has arisen in the territories."

Writing in Haaretz on 21 November, Sarid wrote, "a new custom has come to the country: High Court rulings are one thing, reality is another. One has not the slightest thing to do with the other. The settlements and the outposts are planted firmly in place and refuse to be uprooted; private land of Palestinians is being freely stolen; whole neighbourhoods born in sin are being populated; homes that have been stolen are filled with people; a brazen fence stands according to its original, arbitrary plan with only minimal changes."

Sarid's remarks may even be an understatement of reality.

One noted Israeli journalist intimated to this writer last week that Israel was facing two nightmarish scenarios in light of the settlers' determined refusal to leave the West Bank: "We have two alternatives, either we go into civil war or become a fascist or Nazi state. These two choices are becoming starker with the passage of each day."

When three officers of Germany's foreign intelligence service the Bundesnachrichtendienst (BND), were arrested in Pristina November 19, it exposed that country's extensive covert operations in the heart of the Balkans.

On November 14, a bomb planted at the office of the European Union Special Representative was detonated in downtown Pristina. While damage was light and there were no injuries, U.N. "peacekeepers" detained one of the BND officers hours after the blast when he was observed taking photos of the damaged building. Two of his colleagues waited in a car and acted as lookouts. The officer named these two colleagues as witnesses that he was in his office at the time of the attack.

That office, identified by the press as the "private security firm" Logistics-Coordination & Assessment Service or LCAS, in reality was a front company for BND operations. Its premises were searched three days later and the trio were subsequently arrested and accused by Kosovan authorities of responsibility for bombing the EU building. As a result of the arrests, the BND was forced to admit the real identities of their agents and the true nature of LCAS.

A scandal erupted leading to a diplomatic row between Berlin and Pristina. The German government labeled the accusations "absurd" and threatened a cut-off of funds to the Kosovo government. A circus atmosphere prevailed as photos of the trio were shown on Kosovan TV and splashed across the front pages of the press. Rumors and dark tales abounded, based on leaks believed by observers to have emanated from the office of Kosovo's Prime Minister, the "former" warlord Hashim Thaci, nominal leader of the statelet's organized crime-tainted government.

When seized by authorities one of the BND officers, Andreas J., demonstrated very poor tradecraft indeed. Among the items recovered by police, the operative's passport along with a notebook containing confidential and highly incriminating information on the situation in Kosovo were examined. According to media reports, the notebook contained the names of well-placed BND informants in the Prime Minister's entourage. According to this reading, the arrests were an act of revenge by Thaci meant to embarrass the German government.

But things aren't always as they seem.

On November 29, the trio--Robert Z., Andreas J. and Andreas D.--departed Kosovo on a special flight bound for Berlin where they "will face a committee of German parliamentarians who have taken an interest in their case," according to an account in Spiegel Online.

More curious than a violent attack on the streets of Pristina, a city wracked by gangland killings, car hijackings, kidnappings and assaults is the provenance of the bomb itself. In other words, why would German intelligence agents attack their own? But before attempting to answer this question, a grim backstory to the affair rears its ugly head.

An Agency Mired in Scandal

This latest scandal comes as yet another blow to the BND considering August's revelations by the whistleblowing website Wikileaks that Germany's external intelligence agency had extensively spied on journalists. Like their counterparts at the CIA, the BND is forbidden by law from carrying out domestic operations.

According to Wikileaks documents, journalists working for Focus Magazine and Der Spiegel were collaborators in a scheme by the agency to learn their sources as well as obtaining information on left-wing politicians, including Party of Democratic Socialism (PDS) leaders Gregor Gysi and Andreas Lederer.

Indeed Focus Magazine journalist Josef Hufelschulte, code name 'Jerez, wrote articles based on reports provided by the BND "intended to produce favorable coverage." Wikileaks correspondent Daniel Schmitt and investigations editor Julian Assange comment that, "The document in general shows the extent to which the collaboration of journalists with intelligence agencies has become common and to what dimensions consent is manufactured in the interests of those involved."

In November, Wikileaks published a subsequent document obtained from the telecommunications giant T-Systems. In addition to revealing two dozen secret IP addresses used by the BND for surveillance operations, the document provides "Evidence of a secret out of control BND robot scanning selected web-sites. In 2006 system administrators had to ban the "BVOE" IP addresses to prevent servers from being destroyed." Additionally, Wikileaks revealed the "activity on a Berlin prostitution service website--evidence that intelligence seductions, the famed cold-war 'honeytrap', is alive and well?"

While the document does not spell out who was running the sex-for-hire website, one can't help but wonder whether Balkan-linked organized crime syndicates, including Kosovan and Albanian sex traffickers are working in tandem with the BND in return for that agency turning a blind eye to the sordid trade in kidnapped women.

Kosovo: A European Narco State

When Kosovo proclaimed its "independence" in February, the Western media hailed the provocative dismemberment of Serbia, a move that completed the destruction of Yugoslavia by the United States, the European Union and NATO, as an exemplary means to bring "peace and stability" to the region.

If by "peace" one means impunity for rampaging crime syndicates or by "stability," the freedom of action with no questions asked by U.S. and NATO military and intelligence agencies, not to mention economic looting on a grand scale by freewheeling multinational corporations, then Kosovo has it all!

From its inception, the breakaway Serb province has served as a militarized outpost for Western capitalist powers intent on spreading their tentacles East, encircling Russia and penetrating the former spheres of influence of the ex-Soviet Union. As a template for contemporary CIA destabilization operations in Georgia and Ukraine, prospective EU members and NATO "partners," Kosovo should serve as a warning for those foolish enough to believe American clichés about "freedom" or the dubious benefits of "globalization."

Camp Bondsteel, located on rolling hills and farmland near the city of Ferizaj/Urosevac, is the largest U.S. military installation on the European continent. Visible from space, in addition to serving as an NSA listening post pointed at Russia and as the CIA's operational hub in the Balkans and beyond, some observers believe that Andreas J.'s notebook may have contained information that Camp Bondsteel continues to serve as a CIA "black site." One motive for rolling up the BND intelligence operation may have been U.S. fears that this toxic information would become public, putting paid U.S. claims that it no longer kidnaps and tortures suspected "terrorists."

When NATO partners Germany and the U.S. decided to drive a stake through Yugoslavia's heart in the early 1990s during the heady days of post-Cold War triumphalism, their geopolitical strategy could not have achieved "success" without the connivance, indeed active partnership amongst Yugoslavia's nationalist rivals. As investigative journalist Misha Glenny documented,

Most shocking of all, however, is how the gangsters and politicians fueling war between their peoples were in private cooperating as friends and close business partners. The Croat, Bosnian, Albanian, Macedonian, and Serb moneymen and mobsters were truly thick as thieves. They bought, sold, and exchanged all manner of commodities, knowing that the high levels of personal trust between them were much stronger than the transitory bonds of hysterical nationalism. They fomented this ideology among ordinary folk in essence to mask their own venality. As one commentator described it, the new republics were ruled by "a parastate Cartel which had emerged from political institutions, the ruling Communist Party and its satellites, the military, a variety of police forces, the Mafia, court intellectuals and with the president of the Republic at the center of the spider web...Tribal nationalism was indispensable for the cartel as a means to pacify its subordinates and as a cover for the uninterrupted privatization of the state apparatus. (McMafia: A Journey Through the Global Criminal Underworld, New York: Alfred A. Knopf, 2008, p. 27)

Glenny's description of the 1990s convergence of political, economic and security elites with organized crime syndicates in Western intelligence operations is the quintessential definition of the capitalist deep state.

In Deep Politics and the Death of JFK, Peter Dale Scott describes how the deep state can be characterized by "the symbiosis between governments (and in particular their intelligence agencies) and criminal associations, particularly drug traffickers, in the stabilization of right-wing terror in Vietnam, Italy, Bolivia, Afghanistan, Nicaragua, and other parts of the world." Indeed, "revelations in the 1970s and 1980s about the 'strategy of tension,' whereby government intelligence agencies, working in international conjunction, strengthened the case for their survival by actually fomenting violence, recurringly in alliance with drug-trafficking elements."

Scott's analysis is perhaps even more relevant today as "failed states" such as Kosovo, characterized by economic looting on an industrial scale, the absence of the rule of law, reliance on far-right terrorists (of both the "religious" and "secular" varieties) to achieve policy goals, organized crime syndicates, as both assets and executors of Western policy, and comprador elites are Washington's preferred international partners.

For the ruling elites of the former Yugoslavia and their Western allies, Kosovo is a veritable goldmine. Situated in the heart of the Balkans, Kosovo's government is deeply tied to organized crime structures: narcotrafficking, arms smuggling, car theft rings and human trafficking that feeds the sex slave "industry." These operations are intimately linked to American destabilization campaigns and their cosy ties to on-again, off-again intelligence assets that include al-Qaeda and other far-right terror gangs. As investigative journalist Peter Klebnikov documented in 2000,

The Kosovar traffickers ship heroin exclusively from Asia's Golden Crescent. It's an apparently inexhaustible source. At one end of the crescent lies Afghanistan, which in 1999 surpassed Burma as the world's largest producer of opium poppies. From there, the heroin base passes through Iran to Turkey, where it is refined, and then into the hands of the 15 Families, which operate out of the lawless border towns linking Macedonia, Albania, and Serbia. Not surprisingly, the KLA has also flourished there. According to the State Department, four to six tons of heroin move through Turkey every month. "Not very much is stopped," says one official. "We get just a fraction of the total." ("Heroin Heroes," Mother Jones, January-February 2000)

Not much has changed since then. Indeed, the CIA's intelligence model for covert destabilization operations is a continuing formula for "success." Beginning in the 1940s, when the Corsican Mafia was pegged by the Agency to smash the French Communist Party, down to today's bloody headlines coming out of Afghanistan and Pakistan, global drug lords and intelligence operators go hand in hand. It is hardly surprising then, that according to a report by the Berlin Institute for European Policy, organized crime is the only profitable sector of the Kosovan economy. Nearly a quarter of the country's economic output, some €550 million, is derived from criminal activities.

Though the role of the United States and their NATO partners are central to the drama unfolding today, the BND affair also reveals that beneath the carefully-constructed façade of Western "unity" in "Freedom Land," deep inter-imperialist rivalries simmer. As the socialist journalist Peter Schwarz reports,

Speculation has since been rife about the background to the case, but it is doubtful whether it will ever be clarified. Kosovo is a jungle of rival secret services. In this regard, it resembles Berlin before the fall of the Wall. The US, Germany, Britain, Italy and France all have considerable intelligence operations in the country, which work both with and against one another. Moreover, in this country of just 2.1 million inhabitants, some 15,000 NATO soldiers and 1,500 UN police officers are stationed, as well as 400 judges, police officers and security officers belonging to the UN's EULEX mission. (Peter Schwarz, "Kosovo's Dirty Secret: The Background to Germany's Secret Service Affair," World Socialist Web Site, December 1, 2008)

Into this jungle of conflicting loyalties and interests, international crime syndicates in close proximity--and fleeting alliance--with this or that security service rule the roost. It is all the more ironic that the Thaci government has targeted the BND considering, as Balkan analyst Christopher Deliso revealed:

In 1996, Germany's BND established a major station in Tirana...and another in Rome to select and train future KLA fighters. According to Le Monde Diplomatique, "special forces in Berlin provided the operational training and supplied arms and transmission equipment from ex-East German Stasi stocks as well as Black uniforms." The Italian headquarters recruited Albanian immigrants passing through ports such as Brindisi and Trieste, while German military intelligence, the Militaramschirmdienst, and the Kommando Spezialkräfte Special Forces (KSK), offered military training and provisions to the KLA in the remote Mirdita Mountains of northern Albania controlled by the deposed president, Sali Berisha. (The Coming Balkan Caliphate, Westport: Praeger Security International, 2007, p. 37)

But as Schwarz observed, why would the Thaci government risk alienating the German state, given the fact that after the U.S., Germany "is the second largest financial backer of Kosovo and ranks among the most important advocates of its independence." Why indeed?

According to Balkan Analysis, the International Crisis Group (ICG) funded by billionaire George Soros' Open Society Institute (OSI) and closely aligned with "liberal interventionists" in the United States, were instrumental in arguing that the United States and Germany, should guarantee "future stability," by building up the Kosovo Protection Corps (TMK), the KLA's successor organization, into a well-equipped army. Towards this end, the U.S. and Germany, in addition to arming the organized crime-linked statelet, have provided funds and equipment for a sophisticated military communications center in the capital.

Speculation is rife and conflicting accounts proliferate like mushrooms after a warm rain. One theory has it that senior Kosovan politicians were angered by BND criticisms linking KLA functionaries, including personal associates of Thaci and the Prime Minister himself, with organized crime. Tellingly, Schwarz reports, this "is contrary to the position taken by the CIA."

Is the affair then, merely a falling-out among thieves on how the spoils will be divided?

The CIA: Drugs & Thugs International

As noted above, U.S. destabilization programs and covert operations rely on far-flung networks of far-right provocateurs and drug lords (often interchangeable players) to facilitate the dirty work for U.S. policy elites and American multinational corporations. Throughout its Balkan adventure the CIA made liberal use of these preexisting narcotics networks to arm the KLA and provide them with targets. In their public pronouncements and analyses however, nary a harsh word is spoken.

According to the CIA, by any standard Kosovo's economy is a disaster, but that doesn't prevent the Agency from seeing "significant progress"!

Over the past few years Kosovo's economy has shown significant progress in transitioning to a market-based system, but it is still highly dependent on the international community and the diaspora for financial and technical assistance. Remittances from the diaspora--located mainly in Germany and Switzerland--account for about 30% of GDP. Kosovo's citizens are the poorest in Europe with an average annual per capita income of only $1800--about one-third the level of neighboring Albania. Unemployment--at more than 40% of the population--is a severe problem that encourages outward migration. (Central Intelligence Agency, The World Factbook, November 20, 2008)

Needless to say, one unmentionable "fact" disappeared from the CIA's country profile is the statelet's overwhelming dependence on the black economy. I suppose this is what the Agency means when it lauds Kosovo's transition to a "market-based system"! But as former DEA investigator and whistleblower Michael Levine, author of The Big White Lie, told B92, one of the wings of the Kosovo Liberation Army (KLA) was "linked with every known narco-cartel in the Middle East and the Far East", and that almost every European intelligence service and police has files on "connections between ethnic Albanian rebels and drug trafficking". And dare I say by extension, the CIA itself.

One bone of contention which could have led Thaci and his henchmen to seek revenge against his erstwhile German allies was a 67-page BND analysis about organized crime in Kosovo. As Schwarz noted the dossier, produced in February 2005 and subsequently leaked to the press, "accuses Ramush Haradinaj (head of government from December 2004 to March 2005), Hashim Thaci (prime minister since January 2008) and Xhavit Haliti, who sits in the parliament presidium, of being deeply implicated in the drugs trade."

According to the BND report, "Regarding the key players (e.g., Haliti, Thaci, Haradinaj), there exists the closest ties between politics, business and internationally operating OC [organized crime] structures in Kosovo. The criminal networks behind this are encouraging political instability. They have no interest in building a functioning state, which could impair their flourishing trade." (WSWS, op. cit.)

Haradinaj, an American protégé, became Prime Minister in 2004. However, he was forced to resign his post in March 2005 when the International Criminal Tribunal for the former Yugoslavia indicted him for crimes against humanity. Among other things, Haradinaj was accused of abducting civilians, unlawful detention, torture, murder and rape. Schwarz notes he was acquitted in April 2008 "for lack of evidence, after nine out of ten prosecution witnesses died violently and the tenth withdrew his statement after narrowly escaping an assassination attempt." Talk about friends in high places!

Mirroring evidence uncovered by journalists and investigators regarding the control of the drugs trade by 15 Albanian crime families, the Berlin Institute for European Policy laid similar charges against Thaci, stating that real power in Kosovo is wielded by 15 to 20 family clans who control "almost all substantial key social positions" and are "closely linked to prominent political decision makers."

According to Spiegel, when the BND operation was run to ground with the possible connivance of the CIA, its secret network of informants, instrumental to gaining insight into the interconnections amongst state actors and organized crime were compromised. The BND's Department Five, responsible for organized crime wrote a confidential report linking Thaci as "a key figure in a Kosovar-Albanian mafia network."

Department Two, according to Spiegel, was responsible for telecommunications surveillance. In 1999, the BND launched operation "Mofa99," a wiretap intercept program that targeted high-ranking members of the KLA--and exposed their links to dodgy criminal syndicates and Islamist allies, al-Qaeda. The program was so successful according to Spiegel that since then, "the BND has maintained an extensive network of informants among high-ranking functionaries of the KLA and the Kosovar administration."

Functionaries in possession of many dangerous secrets and inconvenient truths!

As researcher and analyst Michel Chossudovsky wrote back in 2001, among the "inconvenient truths" unexplored by Western media is the close proximity of far-right Islamist terror gangs and planetary U.S. destabilization operations.

Since the Soviet-Afghan war, recruiting Mujahedin ("holy warriors") to fight covert wars on Washington's behest has become an integral part of US foreign policy. A report of the US Congress has revealed how the US administration--under advice from the National Security Council headed by Anthony Lake--had "helped turn Bosnia into a militant Islamic base" leading to the recruitment through the so-called "Militant Islamic Network," of thousands of Mujahedin from the Muslim world.

The "Bosnian pattern" has since been replicated in Kosovo, Southern Serbia and Macedonia. Among the foreign mercenaries now fighting with the KLA-NLA are Mujahedin from the Middle East and the Central Asian republics of the former Soviet Union as well as "soldiers of fortune" from several NATO countries including Britain, Holland and Germany. Some of these Western mercenaries had previously fought with the KLA and the Bosnian Muslim Army. (Michel Chossudovsky, "Washington Behind Terrorist Assaults in Macedonia," Global Research, September 10, 2001)

Fast forward seven years and one can hypothesize that the BND, stepping on the CIA's toes and that agency's cosy intelligence "understanding" with Mafia-linked KLA fighters and al-Qaeda assets, would have every reason to sabotage the BND's organized crime operations--not that the German military intelligence service's hands are any cleaner!

While we may never know all the facts surrounding this curious affair, one thing is certain: the role played by powerful Mafia gangs as a source for black funds, intelligence assets and CIA "agents of influence" will continue. Administrations come and go, but like motherhood and apple pie the shadowy workings of America's deep state is an eternal verity you can count on!

Tom Burghardt is a researcher and activist based in the San Francisco Bay Area. In addition to publishing in Covert Action Quarterly and Global Research, an independent research and media group of writers, scholars, journalists and activists based in Montreal, his articles can be read on Dissident Voice, The Intelligence Daily and Pacific Free Press. He is the editor of Police State America: U.S. Military "Civil Disturbance" Planning, distributed by AK Press.